(Learning Objectives 2: Issuing bonds payable (discount); paying and accruing interest; amortizing the bonds by the effective interest method) On January 31, Daughtry Logistics, Inc., issued fi ve-year, 5% bonds payable with a face value of €11,000,000. The bonds were issued when the market interest rate was 6% and pay interest on January 31 and July 31. Daughtry Logistics, Inc., amortizes bond discounts by the effective interest method.

❙ Requirements 1. Record issuance of the bonds on January 31.

2. Record the semi-annual interest payment and amortization of bond discount on July 31.

3. Record the interest accrual and discount amortization on December 31.